New product introductions for low-income consumers in emerging markets

Facing growth pressures, firms attempt to target the large low-income consumer segment present in emerging markets. This multi-method study develops research insights regarding consumer-, retailer-, firm-, category- and country-level factors that enhance the acceptability, awareness, availability, and affordability of products that facilitate the low-income consumer adoption of and firms’ introduction of new products for low-income consumers. Study 1 uses a qualitative grounded-theory approach by interviewing company managers and low-income consumers in India and Chile. Study 2, empirically tests an integrated multi-level model of several category factors identified in Study 1, combined with country-level factors drawn from the literature, using a unique 12-year longitudinal panel dataset of new product introductions in 27 emerging market countries from Africa, Asia, Eastern Europe, and South America. The research identifies consumer aspirations , region-based versioning , visible packaging and the product demonstrations as critical motivating factors for adoption of products by low income consumers. Consumers’ knowledge of the product category , the concentration of branded products , availability of global brands , and the presence of traditional retail stores motivate firms to launch products for low income consumers in emerging markets.